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Directors Report of JCT Ltd.

Mar 31, 2018

Dear Members

The Directors present the 69thAnnual Report on the affairs of the Company together with Audited Financial Statements for the financial year ended 31st March 2018. The Management Discussion and Analysis is also included in this Report.

1. Financial Highlights

(Rs. in Lakhs)

2017-18

2016-17

Revenue from operations

76.488.41

83,939.90

Other Income

1.045.21

1,678.90

Profit before Finance Cost, Depreciation and Amortization Expense and Tax ,

3.011.04

5,115.34

Finance Cost

3.550.01

3,732.94

Depreciation and amortization Expense

3.049.36

3,108.99

(Loss) for the year before tax

(3.588.33)

(1,726.59)

(Loss) for the year after tax

(3.604.33)

(1,728.33)

2. Dividend

In view of the accumulated losses, the directors are unable to recommend any dividend.

3. Outlook of the Economy

The year 2017 was marked by a number of key structural initiatives to build strength across macroeconomic parameters for sustainable growth in the future. The growth in the first half of the year suffered despite global tailwinds. However, the weakness seen at the beginning of 2017 seems to have bottomed out as 2018 set in. Currently, the economy seems to be on the path to recovery, with indicators of industrial production, stock market index, auto sales and exports having shown some uptick.

Price of Crude Oil is once again making headlines and it has reached the level not seen since first quarter of 2015-16. Current increase in oil prices might have short term implications, but current macro-economic outlook of Indian Economy is very good and fundamentals are very strong to weather any storm. But any further increase in prices might destabilize not just the Indian economy but the global economy.

The International Monetary Fund (IMF) remains bullish on India’s growth potential and has retained its GDP forecast for the country at 6.7 per cent in 2017 and 7.4 per cent in 2018. In its World Economic Outlook Update, it also estimated that the Indian economy would grow by 7.8 per cent in 2019, which make the country the world’s fastest-growing economy in 2018 and 2019, the top ranking it briefly lost in 2017 to China.

Now with widening of current account deficit Indian Rupee depreciation in its value and that will have exert inflationary pressure. Indian policymakers would do well to keep a vigil on oil prices and have contingency plan proactively. We believe that India’s economic outlook remains promising for FY2017-18 and is expected to strengthen further in FY 2018-19.

4. INDUSTRY OUTLOOK

Indian textiles industry is a well-established with showing strong features and a bright future. In fact, the country is the second biggest textiles manufacturer worldwide, right after China. Similar force is demonstrated in the cotton production and consumption trend where India ranks just after China and USA. The textiles manufacturing business is a pioneer activity in the Indian manufacturing sector and it has a primordial importance in the economic life of the country, which is still predominantly based on the agro-alimentary sector.

Textiles industry is not limited to manufacture and export of garments. The country is also significant textiles fiber and yarn manufacturer on the world scene, taking on its own a 12% share of the world’s production volume. India ranks on the second place as regards in production of silk and cellulose fibre and yarn whilst standing on the fifth position when it comes to synthetic fibre and yarn.

The industry is now preparing itself to take share of opportunities expected to arise out of the market freed from quota restrictions and other trade barriers. Industry operators are increasingly moving towards modernization and expansion as encouraged by the so-designated Textile Upgradation Fund Scheme implemented by Government.

The local textile sector is now at a critical stage where it should prepare itself to rise and grab the opportunities that are available through liberalization of the international market. Manufacturers however, were caught in inadvertence as new players started to creep on the market at a time when most operators had attention on imminent opportunities coming from a quota-free market. With traders realizing the threat of relying on a single manufacturing source such as China, India could do well in proposing a valuable alternative to buyers on the international scene, but this is only possible through an adequate and appropriate development strategy and macro-economic policy. In that view, many manufacturing companies in India are rushing towards expansion and modernization options. Manufacturers are having recourse to fund raising programmes pushing EPS to higher growth, dissolving equity on its way. Business collaborations with foreign players, creation of buying offices and Government’s effort to enhance quality production and export are many visible signs of Indians coming into force on the global market.

The future of the textiles industry seems to be bright in all aspects. As such Government places all its trust and relies sector for its strong ‘employment creation’ capability, more precisely in the garments manufacturing side. Lowering tax burdens on companies will play an important part in cutting down production costs and boosting competitiveness, increasing ability to tap high-volume orders from the global market. Modernization would enable companies provide quality and volume solutions which is in constant demand by international buyers.

The home textile sector is in a good position to activate and encourage developments in the overall domestic textile industry. With more emphasis on product having longer cycles than those average apparels, the home textiles manufacturing is more protected than its apparel counterparts. Those wishing to reap the benefits of opportunities have to show good preparatory dispositions as well as willingness to stay on the forefront of the global competition game without these, we could see regional competition grabbing most of the market share.

5. Business Strategy

Textile Unit:

This year again has been a challenging year and most of the companies considering GST / eWay Bill implementation which has by and large slowed down the entire business cycle. The end consumer is not sure about his own end customer buying pattern hence the Mills tend to lose in terms of continuity from there bigger domestic giants . Cash transactions could not be justified and end consumer was not sure whether or not to register and how to tackle paper work and returns. We anticipated this mind set and hence have focused on direct and deemed exports.

Company has plans to shift our base from domestic players to garment exporters and direct fabric exports so that there is enough rotation of funds which is need of the hour and in order to counter this shift and manage our cash flows keeping the capacity occupied we have also taken a conscious move and shift focus to deemed and direct exports. Although this segment is also facing challenge as duty drawbacks have been slashed to 1.3% -1.6 % but there is continuity of business and commitments are honored. Our draw back benefits have also reduced on direct fabric exports but there is immense opportunity since we are competitive against other countries on 100 % cotton and blended fabrics.

Company is now more focusing on technical Fibre fabrics, high value nylon fabrics for Defence and Export needs for parachute products, FR fabric for back packs, coated fabric and work wear segments. There is a huge potential in synthetic segment and with the strong and long term relationship one of our key customers Decathlon we intend to grow further with them. On Cotton segment, we have developed strong relationship with Shahi Exports (Fashion), Gokaldas Exports, Malcolm (Work wear) and Siggi (Garment) who are seeking more capacities and we are all set to step in. We are exploring direct fabric export business with old and new customers in US, Europe, Middle East, Turkey.

Filament Unit

Company continues to enjoy its leadership in Nylon Filament Yarn in terms of product range, quality parameters as well as in volumes. In order to further consolidate its position into value added segments, the Company proposes to install additional Air Texturising capacity. Besides, it will also undertake conversion of additional polyester spinning machines into nylon spinning machines to enhance its production capacity. As reported last year, your Company continuous to pursue diversifying its product range by offering dipped Polyester Tyre Cord Fabric. It is also exploring possibilities of offering dipping services for Rayon Tyre Cord Fabric. Your Company is also pursuing to fully integrate its NTCF capacity and shall approach the Government authorities for requisite permissions to implement these facilities. Your Company is constantly endeavoring to become energy efficient and has initiated steps to replace some of the old equipment to reduce the energy cost.

6. OPERATIONS

Textiles:

The textile unit at Phagwara, despite challenging business environment, the unit produced and sold 328.23 lakhs and 369.98 lakhs meters of fabrics respectively. The technical textiles have been well accepted by the market.

Nylon Filament Yarn:

Nylon Filament Unit has been one of the top Textile Grade Nylon Yarn manufacturers in India with installed capacity of 16000 TPA and 1000 TPA for Nylon Chips. The unit has produced and sold 11543 MT of Filament Yarn and 403 MT of Nylon Chips and sold 12657 MT and 403 MT respectively. Capacity utilization is lower on account of stiff competition and cheap imports in India through ASEAN countries.

7. FINANCE AND ACCOUNTS

The Company has been meeting its repayment obligation as per the terms of restructuring under CDR mechanism.

As mandated by the Ministry of Corporate Affairs, the financial statements for the year ended 31st March 2018 has been prepared in accordance with the Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014. The estimates and judgments relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonable present the Company’s state of affairs, profit/loss and cash flows for the year ended 31st March 2018.

8. ANNUAL RETURN

Extract of Annual Return of the Company is annexed herewith in compliance with the Section 92(3) of Companies Act, 2013 and forms integral part of this Report.

9. DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section134 (3)(c) of the Companies Act, 2013 that;

i). in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii). the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

iii). the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv). the directors have prepared the annual accounts on a going concern basis;

v). the directors, have laid down internal financial controls which were followed by the company, such internal financial controls are adequate and operating effectively; and

vi). the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

10. Declaration by Independent Directors and reappointment, if any Independent Directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (LODR) Regulations, 2015.

11. Remuneration Policy

The Board of Directors has framed a policy, which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The details of this policy have been posted on the website of the Company viz. www.jct.co.in.

12. AUDITORS

Statutory Auditors

M/s Navdeep Singh & Company, Chartered Accountants (Firm Registration No.008400N) are the Statutory Auditors of the Company for the year ended March 31, 2018. Their appointment as the Statutory Auditors will be ratified at the ensuing Annual General Meeting pursuant to the provisions of Section 139 of the Companies Act, 2013, and Rules made thereunder.

The Report given by the Auditors on the financial statements of the company is self explanatory and is a part of Annual Report. Their qualified opinion given in the Report has been fully explained in Note No. 21.2.

Cost Auditors

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Textile & Filament Units every year. The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s Goyal, Goyal& Associates, Cost Accountants, (Firm Registration No. FRN-000100) as Cost Auditor to audit the cost records of the Company for the Financial Year 2018-19. As required under the Companies Act, 2013, a resolution seeking members’ approval for their remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting.

The Cost Audit Report for the financial year 201718 is under finalization and would be filed within the stipulated time with the Ministry of Corporate Affairs.

Secretarial Audit

In compliance with the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Board has appointed Ms. Seema Sharma, Whole Time Company Secretary in Practice (C.P No.4397) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed and forms an integral part of this Report. There is no secretarial audit qualification for the year under review.

13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

14. RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties were on arm’s length basis and in the ordinary course of business. There were no materially significant transactions with the related parties during the financial year, which were in conflict with the interest of the Company. Thus a disclosure in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required.All Related Party Transactions are placed before the Audit Committee and also before the Board for approval. The policy on related party transactions as approved by the Board has been uploaded on the website of the Company.

None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company except remuneration and sitting fees.

15. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

There are no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations.

16. STATUTORY INFORMATION

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies (Accounts) Rules, 2014 is annexed and forms integral part of this Report.

A statement showing the names and other particulars of the employees drawing remuneration in terms of Rule 5(2) & (3) of the of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed and forms integral part of this Report. The said statement is not being sent along with this annual report to the members of the company in line with the provision of Section 136 (1) of the Companies Act, 2013. Further, Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid statement is also available for inspection by Members at the Registered Office of the Company, 21 days before and up to the date of the ensuing Annual General Meeting during the business hours on working days.

None of the employees mentioned in the said statement is a relative of any Director of the Company and none of the employees hold (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company.

17. DIRECTORS

Changes in Directors and Key Managerial Personnel

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Ms. Priya Thapar retires by rotation at the forthcoming Annual General Meeting and being eligible, offers herself for the re-appointment. The Board recommends her re-appointment. Brief profile of Ms Priya Thapar has been given in the Notice convening the Annual General Meeting.

The Board of Directors on recommendation of the Nomination and Remuneration Committee has appointed Mr. Ramswaroop Samria (DIN 00375315) as an Additional Director (Independent) with effect from 30th May 2018. In terms of Section 161 of the Companies Act, 2013, Mr. Ramswaroop Samria holds office up to the date of ensuing Annual General Meeting. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Ramswaroop Samria as an Independent Director, for the approval by the shareholders of the Company for a term of five years.

Mr. Gordhan Bhojraj Kathuria (DIN No.00062088), Director (Independent) of the company, expired on 25th January 2018 and ceased to be the Director of the Company. Directors have placed their condolence on his sad demise and appreciated for his contribution, assistance and guidance during his tenure served with the company for last 19 years. Members acknowledged the contribution he made in the growth and progress of the company.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013, Regulation16(b) and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board of Directors on recommendation of the Nomination and Remuneration Committee has reappointed Mr Samir Thapar as Chairman & Managing Director and Ms Priya Thapar, -Director (Strategic Business Development) of the Company for a period of 3 (three) years with effect from 1.10.2018 and 1.12.2018, respectively subject to approval of shareholders, as their current term of office is upto 30th September, 2018 and 30th November, 2018 respectively.

Formal Annual Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25 of SEBI (LODR) Regulations, 2015, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its constituted Committees from time to time.

Number of Meetings of Board and its Committees

The details of the number of meetings of the Board held during the financial year 2017-18 forms part of the Corporate Governance Report.

18. DEPOSITS

The Company has not been accepting fresh/renewals of deposits and is regular in repayment and servicing of interest on fixed deposits. Unclaimed Deposits remained on 31.03.2018 were of Rs.107.83 lacs and deposits amounting to 92.05 lakhs paid subsequently.

19. INTERNAL CONTROL SYSTEMS

The Company has a well established framework of internal controls in all areas of its operations, including suitable monitoring procedures and competent personnel. In addition to statutory audit, the financial controls of the Company at various locations are reviewed by the Internal Auditors, who report their findings to the Audit Committee of the Board. The Audit Committee is headed by an Independent Director and it ensures independence of functions and transparency of the process of supervision. The Committee meets on a regular basis to review the progress of the internal audit initiatives, significant audit observations and planning and implementation of follow-up action required. The Company conducts its business with integrity and high standards of ethical behavior and in compliance with the laws and regulations that govern its business.

The Company has in place adequate internal financial control systems, commensurate with the size, scale and complexity of its operations. The Company has appropriate policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence of the Company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. Based on the report of the internal auditor, respective departments undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

20. SHARE CAPITAL

The paid up Equity Share Capital as at March 31, 2018 stood at Rs.149.53 Crores and during the year under review, the Company has not issued shares with differential voting rights.

21. FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)

The outstanding amount of FCCBs of Rs. 11,022.28 lakhs (including interest of Rs.3848.28 lakhs) having fallen due on 5.12.2017 to the FCCB holders could not be paid due to cash crunch. A mutual understanding between the FCCB holders and the Company was arrived at to settle the dues by way of upfront payment of certain dues and issue of fresh equity in the Company after receipt of approval from regulatory authorities. The Company intends to pay upfront by availing fresh funds from a financial organization from whom a sanction has been received subject to approvals from the Banks of the Company. The accounting impact will be taken after execution of settlement in all respect.

22. CORPORATE GOVERNANCE

In compliance with the Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015, a separate report on Corporate Governance practices followed by the Company, together with a certificate from the Company’s Auditors confirming compliance forms an integral part of this Report.

23. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy to report genuine concerns or grievances for redressal. The Whistle Blower Policy has been posted on the website of the Company viz.www.jct.co.in. During the year under review no complaint was received by your company.

24. RISK MANAGEMENT

The Company has a Risk Management Policy for identifying, prioritizing and mitigating risks, which may impact attainment of short and long term business goals of the Company. The risk management framework is reviewed periodically by the risk management teams at all the units of the Company constituted by the Board which monitors and evaluates the effectiveness of risk management framework of the Company and strengthens it.

25. CORPORATE SOCIAL RESPONSIBILITY

The Company has drafted the Corporate Social Responsibility Policy which may be accessed on the website of the Company www.jct.co.in. As there is net average loss incurred by the Company during the three preceding financial years, the company need not to spent any amount towards Corporate Social Responsibility activities during the year ended 31.03.2018. The CSR Committee comprises of three members. One member of the Committee is Independent Director.

26. CONSERVATION OF RESOURCES

The Company firmly believes that without safe, clean environment and healthy working conditions, the overall economic growth cannot be achieved and maintained. The company also takes all possible measures to prevent accidents and occupational hazards. The manufacturing operations are conducted to ensure sensitivity towards the environment and minimize waste by encouraging “Green Initiative” practices. Efficient management and use of renewable resources are encouraged. All employees are obliged to ensure that they fully understand all policies and they fully comply with the requirements.

27. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE

During the year under review, the Company has not received any complaint under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has also formed an Internal Committee for addressing the complaints received under the said Act

28. STATEMENT OF CAUTION

Statements in this Directors’ Report and Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or predictions may be “forward-looking statements” within the meaning of applicable securities laws and regulations .Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company’s operations include raw material availability and its prices, cyclical demand and pricing in the Company’s principal markets, changes in Government regulations, Tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

29. APPRECIATION & ACKNOWLEDGEMENTS

The Board of Directors would like to express their sincere appreciation for the assistance and cooperation received from the, banks, Government authorities, customers, vendors and members during the year under review. The Board of Directors also wish to place on record its deep sense of appreciation for the committed services by the Company’s executives, staff and workers.

For & on behalf of the Board

SAMIR THAPAR

Chairman and Managing Director

DIN: 00062287

Place : New Delhi

Date : 14.08.2018


Mar 31, 2015

Dear Members

The Directors are pleased to present the 66th Annual Report on the affairs of the Company together with Audited Financial Statements for the financial year ended 31st March 2015. The Management Discussion and Analysis is also included in this Report.

1. Financial Highlights

(Rs. in lacs)

2014-15 2013-14 (12 Months) (6 Months)

Gross Income from operations 102,214 49,224

Other Income 777 482

Profit before Interest, Depreciation, 7,103 3,664 tax and Exceptional Items

Interest and financing charges 3,366 1,706

Depreciation and amortization Expense 2,758 1,656

Exceptional Items

- Profit/ (Loss) of Discontinuing (102) (51) Operations

Provision for Tax

- Current Year - -

- Earlier Year - (83)

Net Profit 878 334

2. Transfer to Reserves & Dividend

No amount is appropriated from Profit and Loss Account and transferred to any Reserve Account. In view of accumulated losses, the directors are unable to recommend any dividend.

3. Outlook of the Economy

As per the latest GDP growth estimates, Indian economy grew by 7.4% in FY 15 compared to 6.9% in FY 14, mostly driven by improved economic fundamentals and revision of GDP methodology calculations. Even inflation showed signs of moderation, a welcome sign - wholesale price and customer price inflation declined to 4.2% and 7.4% respectively, compared to last year's 6.3% and 10.1%. Reduced inflation, falling crude oil prices, stable Rupee, improved purchasing power and consumer spending, higher capital inflows supported by the government policy reforms have already put India on an accelerating growth track and improved business outlook.

The Indian Textile Industry counts among the leading textile industries in the world; its role in the country's economic growth is significant. It accounts for 14% of India's total industrial production and 4% of India's GDP. After witnessing challenges during FY 13 and most part of FY 14 given unfavorable economic conditions, the Indian textile and garment sector has seen reversal of trends in second half of FY 14. With domestic and global economic conditions improving gradually alongwith the focus made by Ministry of Textiles, Indian textile and garment sector is set for growth. It has the potential to double itself in size over the next 6-7 years. Among the major competing nationals,

China is losing its competitive advantage in textiles mainly on account of increasing labour costs, appreciating Yuan, rising power costs, focus on domestic market and also due to conscious strategy to move higher value addition industries. Other major exporting countries like Pakistan and Bangladesh are facing geo-political issues. In this scenario all major export markets like USA, Europe and Australia are increasingly looking to shift a large portion of their sourcing pie. India is well placed to fill this gap since its entire major costs like cotton, yarn, power, wages, dyes and chemicals are today globally competitive. In addition, the government also has been supportive for the industry and in order to unlock the complete potential of India, more efforts are needed from the industry as well the government.

'Make in India' campaign covering 25 sectors, including the textile and garment industry has put in place the logistics and systems to address in a timely manner queries of potential investors. At present, the Government of India (GOI) allows 100% foreign direct investment under the automatic route in the textile sector, subject to all applicable regulations and laws, which effectively backs the make in India program for the textile and garment industry.

The Cabinet Committee on Economic Affairs late in August 2014 gave its approval for continuing the Textile Up- gradation Fund Scheme (TUFS) during the 12 plan period with major focus on power looms in accordance with the Budget announcement for the financial year 2013-14.

4. Business Strategy

The last two years were very challenging for the Textile Industry as a whole due to less demand from the West, this played havoc with the capacity utilization. The low demand put pressure on the prices, which headed southwards. The input costs also remained very high like power & fuel, labour cost and transportation cost due to hike in fuel cost. During the last few months, there have been medium surge in demand from the export with very less support from domestic front. In order to gain advantage of this changed situation the team in JCT has worked on format wherein they have tried to reduce WIP by better coordination and faster money inflow with the available resources on which the company has been working till date. This complete revamping of thought has led to gaining of confidence of the customer and the supplier. Market is expected to improve in the near future as demand expected to surge owing to change in market situations in overseas and domestic business owing to seasonal demands. The emphasis of the management is to run the plants at optimum level and remove bottlenecks in Operations.

The Company entered into a new segment of Home Furnishing last year with the brand JCT Homes. The market response has been quite good and the company expects a substantial volume for the full year during the financial year 2015-16. It is a capital intensive segment. The company has also entered into a new product line of Technical Textiles and the response from the customers has been encouraging. It requires specific fibers which is not available in India and needs to be imported. The margins in both, Home Furnishing and Technical Textiles have been quite good.

In Nylon Filament Unit, technology up-gradation would be main thrust going forward to remain competitive in the market, the unit is to upgrade itself in coming years. Since market is growing at considerable pace, other manufacturers are in expansion mode by installing Fully Drawn Yarn (FDY) machines. In order to compete with FDY product, unit is exploring lower capital cost possibility to substitute LOY (Low Oriented Yarn). The unit is exploring possibility of making Nylon Fibre, which is being used as replacement of natural fibre like wool.

5. OPERATIONS

Textiles:

The performance of textile unit during the year under review has been very encouraging and turnover crossed all time high of Rs 600 Crores. The unit, besides producing yarn for in-house requirement, produced for market also sold around 250 MT / month. With minor debottlenecking, the unit has now been producing technical yarn on conventional machines. The unit upgraded Continuous Dyeing Range - I, and revamp 50 TPH Boiler with minor investments to improve upon the working of processing department and boiler efficiency.

There have been substantial initiatives in Synthetic Fabric (Taffeta) Unit like introduction of Dope Dyed Fabrics, outsourcing grey fabrics to optimize the processing capacity and R&D to use indigenous coating chemicals without compromising on quality.

Nylon Filament Yarn:

The Filament unit has emerged as top Textile Grade Nylon Yarn manufacturer in India despite higher & cheaper imports are coming to India through ASEAN Countries. The unit managed to sell 13601 MT of filament yarn and 199 MT of nylon chips. The raw material, Caprolactum, being petroleum product remained in the range of Rs 145/- per kg to Rs 157/- per kg before falling to Rs 112/- /per kg at the fag end of FY 15. The realization, too, remained more or less stable throughout the year in the range of Rs 260/ - to Rs 270/- per kg.

6. FINANCE

The Company has been meeting its repayment obligation as per the terms of restructuring under CDR mechanism. The scheme has been implemented fully except of the filing of charge under CDR Scheme which could not be filed due to the Order of the Hon'ble High Court of Punjab at Chandigarh. However, all the immoveable and moveable assets including current and book debts are charged with the secured lenders in earlier years. The company is grateful to lenders for their continued support.

7. SHARE CAPITAL

During the year under review, the Company has not issued shares with differential voting rights. The Paid-up Capital as on March 31, 2015 was Rs. 16319.82 Lakhs divided into 55,67,92,649 Equity Shares of Rs. 2.50 each, 10,00,000 Optionally Partially Convertible Preference Shares of Rs. 100 each and 14,00,000 Optionally Convertible Preference Shares of Rs. 100 each.

8. FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)

The company could not redeem the outstanding FCCBs of US$ 12.49 million alongwith redemption premium. The Trustee of the FCCB holders filed a winding up petition with Punjab & Haryana High Court at Chandigarh on 29th September 2012. The Winding up petition was disposed of by the Hon'ble High Court on 27th January 2015. The Hon'ble Court directed the Company to pay 25% of dues within 6 months and balance thereafter unless rescheduled. Further, the Company has been restrained to create further Charge. The Appeals have been filed against the Order with the Senior Bench of Punjab & Haryana High Court at Chandigarh by the Trustee and the Company on various grounds which are pending disposal. Notwithstanding the aforesaid appeals, the Company continues to negotiate / discuss with the FCCB holders for the settlement of dues. The Company is hopeful of an amicable resolution of the dispute through negotiation.

9. DEPOSITS

During the year Company accepted fixed deposits of Rs.149.43 lakhs which were covered under Chapter V of the Companies Act 2013. Deposits of Rs.380.54 lakhs including unclaimed of Rs 10.08 lakhs accepted prior to 1.4.2014 will be paid as and when due and claimed. Out of unclaimed fixed deposits amounting to Rs.6.31 lakhs were paid subsequently. The Company is regular in repayment and servicing of interest on fixed deposits.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

11. CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the Stock Exchange, a separate report on Corporate Governance practice followed by the Company, together with a certificate from the Company's Auditors confirming compliance forms an integral part of this Report.

Pursuant to Section 177(8) of the Companies Act, 2013, the composition of the Audit Committee is given in the Corporate Governance Report.

12. AUDITORS

Statutory Auditors

M/s S.P. Chopra & Company (Firm Registration No.000346N), Chartered Accountants, were appointed as Statutory Auditors of your Company at the last Annual General Meeting held on 25.09.2014 for a term of three consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by the Members at every Annual General Meeting.

The Report given by the Auditors on the financial statements of the Company is self explanatory and is a part of the Annual Report. However, in respect of certain observations made by the auditors in their Report to the members of the Company, directors have to submit that (a) the redemption of FCCBs was due on 8th April 2011, for US$ 25.42 million alongwith redemption premium. The dues for FCCBs of US$ 12.93 million were settled by conversion into equity shares. The holders of balance outstanding of FCCBs of US$ 12.49 million filed a winding up petition in Punjab & Haryana High Court on 29.09.2012. The winding up petition has been disposed of by the Hon'ble Court and directed the Company to pay 25% of the dues within 6 months and balance thereafter unless rescheduled and company is restrained from creating further charge. The appeals have been filed by both parties on various grounds which are pending disposal. Notwithstanding the aforesaid appeal, the company continues to negotiate / discuss with the bondholders for the settlement of dues. Non-provision of Rs 2258.73 lakhs towards yield protection is considered necessary as the matter is sub-judice and under negotiation / discussions with bondholders; (b) delay in deposit of statutory dues were for very short period due to non-availability of funds timely; (c) delay in respect of cheques by the depositors led to delay in clearance of cheques; (d) The financial statements have been prepared on going concern basis although accumulated losses have eroded substantial net worth, on the strength of continued support from the promoters, bankers / other lenders and likely gain from sale of proposed non-core assets which will reduce the debt of the company substantially; and (e) Uncertainty related to outcome of the appeal filed with Courts of Appeals at Malaya for a claim of Rs 788.25 lakhs by ex-employees of CNLT, Malaysia; The Company made an advance payment of US$ 890,000 for purchase of yarn to CNLT, Malaysia now under liquidation in December 2006. CNLT could not supply materials in time and JCT suffered a loss and demanded compensation from them. CNLT, Malaysia refunded US$ 1,250,000 in June 2007 as refund of advance alongwith compensation. On the petition filed by the ex-employees of CNLT, the Hon'ble Court at Malaya directed company to return the entire amount. JCT appealed against the order with Courts of Appeals in Malaya which is pending disposal. The company is legally advised that provision of said contingency is not necessary as the appeal against the said order will most likely be allowed.

Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules 2014, the cost audit records maintained by the Company in respect of its textile and filament yarn units are required to be audited.

The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s Goyal, Goyal & Associates, Cost Accountants, as Cost Auditor of the Company for the financial year 2015-16 at a remuneration of Rs. 1,25,000/- plus service tax as applicable and reimbursement of out of pocket expenses. As required under the Companies Act, 2013, the remuneration payable to Cost Auditor is required to be placed before the members for ratification. Accordingly, a resolution seeking members' approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting.

The cost audit report for the financial year 2013-14 was filed with the Ministry of Corporate Affairs on 26th September, 2014.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Ms. Seema Sharma, Whole Time Company Secretary in Practice (C.P No.4397) to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as Annexure 'A' and forms an integral part of this Report.

There is no secretarial audit qualification for the year under review.

13. EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT - 9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure 'B'

14. STATUTORY DISCLOSURES

Conservation of Energy, Technology Absorption & Foreign Exchange Earnings & Outgo

The particulars relating to energy conservation, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure 'C' to this report.

Particulars of Employees

The information required under section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Director's Report for the year ended 31.03.2015 is given in a separate annexure to this report. The above annexure is not being sent along with this report to the members in line with the provisions of section 136 of the Act. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by the Members at the Registered Office of the Company, 21 days before the 66th Annual General Meeting and upto the date of ensuing Annual General Meeting during the business hours on working days.

None of the Employees listed in the said annexure is a relative of any Director of the Company. None of the employees hold (by himself or alongwith his spouse and dependent children) more than 2% of the equity shares of the Company.

15. DIRECTORS

Changes in Directors and Key Managerial Personnel

During the year under review, there was no change in the Board of Directors and Key Managerial Personnel.

Ms. Priya Thapar will retire at the forthcoming Annual General Meeting of the Company and being eligible, offer herself for re-appointment.

Declaration by Independent Directors and re- appointment, if any

All independent directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Formal Annual Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its constituted Committees from time to time. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Remuneration Policy

The Board of Directors has framed a policy which lays down a framework in relation to criteria for selection, appointment, remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy is stated in the Corporate Governance Report.

Number of Meetings of Board and its Committees

The details of the number of meetings of the Board held during the financial year 2014-15 forms part of the Corporate Governance Report.

16. WHISTLE BLOWER POLICY:

The Company has a Vigil Mechanism named Whistle Blower Policy to deal with the instances of fraud and mismanagement, if any. The details of Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the website of the Company.

17. RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties were on arm's length basis and in the ordinary course of business. There were no material significant related party transactions made by the Company during the year under review with the Promoter/Directors or Key Managerial Personnel. All related party transactions are placed before the Audit Committee as also to the Board for approval and omnibus approval was obtained on a quarterly basis for transactions which are of repetitive natures. The policy on related party transactions as approved by the Board has been uploaded on the website of the Company. None of the Directors has any pecuniary relationship or transactions vis-a-vis the company. During the year ended 31.03.2015, there was no transaction under Section 188 of the Companies Act, 2013, therefore , form AOC-2 is not applicable to the Company.

18. RISK MANAGEMENT

Pursuant to Section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the Listing Agreement, the company has constituted a Risk Management Committee. The details of the committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board Report. It may be noted that at present none of the identified risks is such which may threaten the existence of the company.

19. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There are no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations. However, pursuant to a petition filed by the ex-employee of CNLT, Malaysia (under liquidation), the Hon'ble Court of Malaysia at Kuala Lumpur in its Order dated 13.06.2014 directed the Company to return US$ 12,50,000. The Company has filed an appeal against the said Orders with the Courts of Appeals at Malaysia, which is pending disposal.

20. INTERNAL CONTROL SYSTEMS

Company has a well established and effective internal control and risk-mitigation system in all areas of its operations, including suitable monitoring procedures and competent and qualified personnel. In addition to statutory audit, financial controls are reviewed by independent agency of internal auditors, who report their findings to the Audit Committee of the Board. The Audit Committee of the Board of Directors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions taken. The Company conducts its business with integrity and high standard of ethical behavior and in compliance with the laws and regulations.

21. CORPORATE SOCIAL RESPONSIBILITY

As a part of its initiative under the "Corporate Social Responsibility" (CSR) drive, the Company has set up Corporate Social Responsibility Committee (CSR Committee) as per the requirement of the Companies Act 2013. The CSR policy was approved by the Board of Directors and has been uploaded on the Company's website i.e. www.jct.co.in. The list of Programs and other imperative information of CSR is mentioned in the said policy.

The members of the CSR Committee are Mr Samir Thapar - Chairman & Managing Director, Ms Priya Thapar - Director HR and Mr Gordhan Bhojraj Kathuria - Independent Director. Due to the accumulated losses the average net profit of last 3 years is coming as negative, hence the contribution under CSR, is not applicable for this financial year.

However, the Company's Units at Phagwara and Hoshiarpur have residential colonies for workers and staff. The Company's unit at Phagwara is running a co-education school which provides free education to the children of the workers right upto the class 12th standard and similar school is being run in Hoshiarpur upto 8th standard.

22. CONSERVATION OF RESOURCES

Company's working is as per applicable statutory provisions pertaining to health and safety and Company also takes all possible measures to prevent accidents and occupational hazards. The manufacturing operations are conducted to ensure sensitivity towards the environment and minimize waste by encouraging "Green Initiative" practices. Efficient management and use of renewable resources are encouraged. All employees are obliged to ensure that they fully understand all policies and they fully comply with the requirements.

23. DISCLOSUIRE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment at work place and has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. The Company has not received any complaints on sexual harassment and hence no complaints remain pending as of 31st March, 2015.

24. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(3) (c) of the Companies Act, 2013, your Directors make the following statement that :

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors, had laid down internal financial controls which were followed by the company, such internal financial controls are adequate and operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

25. STATEMENT OF CAUTION

Statements in this Directors' Report & Management Discussion and Analysis Report describing the Company's objectives, projections, estimates, expectations of predictions may be forward looking within the meaning of applicable laws and regulations. Actual results could, however, differ materially from those expressed or implied. Important factors that could make difference to the Company's operations include raw material availability and its prices, cyclical demand and pricing in the Company's principle markets, changes in Government regulations, tax regimes, economic developments within India and globally.

26. APPRECIATION & ACKNOWLEDGEMENTS

Your Directors wish to place on record their deep appreciation for the contribution made by the workers and employees at all levels but for whose hard work and support, your Company's achievements would not have been possible. Your Directors also wish to extend their appreciation for the assistance and co-operations received from the bankers, investors, customers, dealers, agents, suppliers for their continued support and faith reposed in the Company.

For and on behalf of the Board

Place : New Delhi SAMIR THAPAR Date : 19.05.2015 Chairman & Managing Director

DIN : 00062287


Sep 30, 2013

To the Members of JCT Limited

The Directors of your Company present the 64th Annual Report on the affairs of the Company together with audited statement of account of the Company for the 18 months period ended on 30th September, 2013.

The highlights of financial Results for the year are given below:

(RS.in lacs)

2012-13 2011-12 (18 Months) (12 Months)

Gross Income from operations 1,32,643 82,797

Other Income 1,823 728

Profit before Interest, Depreciation, tax and Exceptional Items 6,284 2,223

Interest and financing charges 5,295 4,116

Depreciation and amortization Expense 7,392 4,695 Exceptional Items

- Profit/(Loss) from Discontinuing

Operations (674) (143)

- Secured Lenders'' Sacrifice (1,622)

-Provision for Tax

- Current Period

- Earlier Year 82 14

Net Profit/(Loss) (8,780) (6,805)



Dividend

In view of losses, the Directors are unable to recommend any dividend.

Operations

The global economy has been passing through a prolonged phase of uncertainty and the low growth along with the atmosphere of hesitancy is also reflected in India. The recovery from the global crisis of 2008-09 in the advanced economies has been uneven and fragile and this as well as a number of its own problems has had a notable dampening effect on growth and business confidence in India over the last two to three years. Continuing high inflation, unacceptable level of fiscal and current account deficits, lackluster performance on the export front as a fall in the rate of growth in industrial production, high prices of crude in international markets- all these have added to the reasons for low economic growth. Further, a consequential tight monetary policy during the major part of the period coupled with stalled reforms, electricity shortages and lack of rain in some parts of the country have all contributed to lower business confidence. These factors have adversely impacted government spending and investment by private sector for various project related to infrastructure development, housing and industry. As the government has over the last few months taken some action to revive industrial growth, encourage fresh investment and seems committed to reforms in terms of keenly awaited measures being promised for implementation, our economy in the coming years should regain a trajectory of high growth, nearer to that witnessed in the recent past.

The Indian Textile Industry is one of the leading Textile Industries of the world. Though the Industry was predominantly, unorganized industry even a few years back, but the scenario started changing after the economic liberization of Indian economy in 1991. The opening of the economy gave the much needed thrust to the Industry and now it has successfully become one of the largest industries in the world.

The textile Industry plays a pivotal role in the economic life in the country. Apart from providing one of the basic necessities of life, the industry also plays a vital role through its contribution of about 14% to Industrial Production, 4% to Gross Domestic Product (GDP), and 11% to the country''s export earnings as per Government of India, Ministry of Textiles, Note on Textile and Clothing Export of India. It provides direct employment to over 45 million people and thus the Textile Industry is the second largest provider of employment after agriculture. Accordingly the growth and development of the industry has a direct bearing on the economy of the nation and its people.

Textile Unit

The textile division operated at an average of around 75% and produced 5.53 crores meters of fabrics during the 18 months period ended on 30th September 2013.The utilisation of capacities at Textile Units at Phagwara suffered very adversely due to shortage of working capital funds. The performance also affected besides lower capacity utilisation adverse fluctuation in foreign currency, cost of power & fuel increased substantially since power rates increased by PSEB and also rice husk. The increase in inputs the selling prices increased marginally during the period, thus leading to strain on the overall margins. However, the performance during the quarter ended 30th September 2013 improved substantially in terms of turnover and the margins.

- The company is having 19.5 MW in house rice-husk based power plants. The rates of rice husk have been on the rise this year.

- The company incurred operational cash losses during the financial year 2008-09 to 2012-13 and continued to service interest and repayment of debts to the lenders in terms of various loan agreements entered into with lenders despite losses which resulted in further erosion of working capital and lower capacity utilization.

In Sriganganagar unit, the operations were discontinued in earlier years. The agreement to sell entered into with the buyers of land at Sriganganagar was terminated during the year due to non-fulfillment of conditions of the agreement by the buyer for quite a long time.

Industry Scenario

The Indian textile industry is on a comeback trail due to an improved US economy, a recovering demand from the European Union and favourable raw material prices. China, a major textile producer for about two decades is now focusing on other sectors, which should open up opportunities for other textile producing countries such as India and Bangladesh. As a result, India, Bangladesh and Vietnam are receiving more orders due to reduction in the global spinning capacity and cut down in cotton imports by China. The global buyers, therefore, are looking at India as one of the major sourcing destinations. The Indian textile industry is competitively placed vis-à-vis competitors. India offers higher skills, lower cost, modern technology, global acceptance and a highly creative pool of design talent. A supportive policy regime and the absolute commitment of private enterprise add strength to Indian prospects. India is among the few textile manufacturing countries, which is fully integrated from fibre to finished products.

Financial problems:

In light of the scenario, as explained above, owing to marketing difficulties, lower capacity utilisation the profitability of the Textile operations remained in the negative zone. Consequently in this situation the earnings which had gone negative on account of low capacity utilization, the company ended up paying interest to the Banks out of working capital. This situation led to further erosion in already strained working capital.

Now that the fabric demand has picked up, most Textile Companies of the country are running their Plants at full capacity. Inspite of the order-book being comfortable, full capacity utilization your Company continues to be elusive on account of working capital constraints.

Steps initiated by the company:

- The company has since expanded its customer base and has gone deeper with the existing customers to fully secure its production capacities. The company in these years, focused, especially on work-wear and sportswear segments.

- The marketing strategy of your company has been changing with the time and there has been a shift in product mix accordingly.

- The company has been very guarded in covering cotton in the current season. The management is ensuring to run the plants at maximum possible levels.

- The company has taken several power saving initiatives, which will cover a part of husk price hike.

Filament Unit

JCT continues to maintain its position as one of the largest Textile Grade Nylon yarn manufacturer in India with installed capacity of 14,000 TPA. During the period the unit produced 18170 MT of filament yarn with average denier of 35.2.

The continuous upward trend in prices of Caprolactum has been a major concern for the company. The Caprolactum prices increased from average of Rs 139.67 per kg in 2011-12 to Rs 146.16 per kg during the period with an increase 4.65% The capacity of the market to absorb prices is limited as weavers start moving to other type of yarns.

The company has made a major shift in the product mix where the dependability on yarn sold in Surat market has been shifted to yarn being sold in Amritsar and Mau markets. The change is very significant as LOY base 20 Mono Yarn is less prone to market fluctuation and has a much higher margin.

The unit to keep the profitability in place has started selling Steam to other parties on profit sharing basis, which has resulted good profits to the unit.

Industry Scenario

In last 18 months, Overall Nylon Textile filament market size has increased from 5200 MT to 6300 MT mainly in FDY Multi-Filament segment with major share of growth in Surat region. In total product mix, share of Mono-Filament has come down from 2000 MT to 900 MT while FDY Multi-Filament has increased from 3100 MT to 4500 MT. Partly this increase in FDY segment has been met by Imports and balance approx 40% increase by New Spinners. As on date, further 500 MT /Month of capacity is in pipe line and will be commissioned in next six months.

The company expects that market will keep on expanding in Nylon Filament Yarn in immediate future @ 10% PA and mainly in FDY Multi-Filament Yarn. As far as competition is concerned, major threat remains from imports mainly from Vietnam & Taiwan having cost advantages.

Finance

During the period, the company has successfully implemented restructuring scheme with the lending banks under Corporate Debt Restructuring (CDR) mechanism. The company is regular in repayment of interest and installments to the banks in line with the scheme approved by the CDR Cell on 21st September 2012. The additional working capital which was part of the scheme could not be availed due to the order of the Hon''ble High Court of Punjab at Chandigarh restraining company to create charge over its assets.

The company has issued and allotted 40880000 Equity Shares of Rs 2.50 each to M/s Provestment Securities Pvt Ltd., a promoter company and also 40880000 Equity Shares of Rs 2.50 each to lending banks towards part settlement of their sacrifice on NPV basis as per stipulations of the CDR Scheme.

M/s Provestment Securities Pvt. Ltd., a promoter company, also infused Rs 5.78 crores as Subordinate Debt as per the condition of CDR Scheme.

Foreign Currency Convertible Bonds (FCCBs)

The Company could not redeem the Foreign Currency Convertible Bonds (FCCBs) on due date 08.04.2011 for paucity of cash funds. In the meantime, the Bank of New York, trustees of the FCCBs filed a winding up petition in the Punjab & Haryana High Court on 29th September 2012, which is pending for disposal. The majority of bondholders around 51% of the value of bonds have objected to the winding up in the Court and also agreed to convert their bonds of US$ 12.93 million into 11,59,54,059 equity shares of Rs 2.50 each in settlement of their dues.

The trustees are now representing the minority of the bondholders who are not in agreement with the proposal submitted by the company.

During the last hearing on 14th November, 2013, the Hon''ble High Court fixed next date of hearing on 9th and 10th January 2014 on the issue of maintainability of the winding up petition. The company has been advised that the merit of the case do not warrant winding up.

Net Worth Erosion

The accumulated losses of the company at the end of 18 months period ended on 30th September 2013 have resulted in erosion of its net worth. The company will take necessary steps to comply with the requirements of the Sick Industrial Companies (Special Provision) Act, 1985. Shareholders are requested to take note of this erosion and consider the same at the Annual General Meeting of the members being convened on 30th December 2013. It must also be noted that consequent to the settlement with Foreign Currency Convertible Bond Holders having around 51% value of the bonds i.e. US$ 12.93 millions, upon receipt of regulatory approvals which are under process, the net worth of the company will improve by around Rs. 93 crores and no further compliance with the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 will be required. The Board of Directors of the company therefore perceive that the negative net worth position is purely temporary till the conversion of a portion of the Foreign Currency Convertible Bonds into equity shares and reserves created out of such conversion.

That in case the bonds are not converted into equity for whatever reason then management is conscious that applicable reference will be filed within the statutory period.

Fixed Deposits (FDs)

Deposits remaining unclaimed at maturity amounted to Rs. 102.32 lakhs as on 30th September 2013. Of the above, deposits of Rs. 20.42 lakhs have been repaid subsequently. The company is regular in repayments and servicing of interest on fixed deposits.

In view of substantial erosion in net worth in earlier year the company had stopped accepting fresh and renewals of deposits.

Statutory Disclosures

The particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are given in a separate Annexure to this Report. The Annexure is not being sent alongwith this Report to the Members of the Company in line with the provisions of Section 219(1)(b)(iv) of the said Act. These documents will be made available on request by any member of the Company.

The statement containing the information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 are annexed hereto and forms an integral part of the report.

Pursuant to Clause 49 of the Listing Agreement, report on Corporate Governance and Management Discussions and Analysis is annexed hereto and forms an integral part of this report.

Directors'' Responsibility Statement

As required under Section 217 (2AA) of the Companies Act, 1956 this is to confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanations relating to material departures, if any;

ii) such accounting policies have been selected and applied consistently and judgments/estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii) proper and sufficient care have been taken with best of knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis.

Auditors

M/s S.P. Chopra & Company, Chartered Accountants, Auditors of the Company, retire and being eligible offer for re-appointment. The Audit Committee and the Board of Directors recommend the re-appointment of M/s S.P. Chopra & Company as the Auditors of the Company.

Auditors'' Report

The report by the auditors is self-explanatory. However, in respect of certain observations made by the Auditors in the Annexure to their main Report to the members of the Company, directors have to submit that (a) non-clearance / payment of cheques issued to fixed deposit holders, the same have been issued to them timely and are under clearance in the banks; (b) delay in deposit of statutory dues were for very short period due to non-availability of funds timely; (c) the redemption of FCCBs was due on 8th April 2011, for US$ 25.42 million alongwith redemption premium of US$ 5.08 million, the company could not make payment due to paucity of funds and approached bondholders for restructuring. Bondholders for value of US$ 12.93 million (51% of outstanding) have agreed for converting their bonds into equity. The company is in the process of obtaining statutory approvals for conversion of bonds into equity shares. In the meantime winding up petition filed by the trustees before Hon''ble High Court of Punjab & Haryana at Chandigarh, which is pending hearing / disposal. In the light of merit of the petition, the company does not anticipate any adverse outcome of the said litigation.

Cost Auditors

Pursuant to provisions of Section 233-B of the Companies Act, 1956, your Directors have appointed Mr. P.K. Verma AICWA, ACMM, as the Cost Auditors to conduct the Cost Audit of Textile Units at Phagwara and Sriganganagar and Filament Unit at Hoshiarpur, for the year ending on 30th September, 2013 and the requisite approval of Central Government have been received.

They were also appointed to submit the Cost Compliance report for the Financial Year ended 31st March, 2012 which has been filed with the Ministry of Company Affairs.

Directors

In accordance with the provisions of the Companies act, 1956 and Articles of Association of the Company, Mr Gordhan Bhojraj Kathuria, retire by rotation and being eligible offer himself for re-election.

Mr. Chander Mohan Bhanot has joined the Board as Additional Director w.e.f 24th January, 2013, and holds office as Additional Director upto the date of the forthcoming Annual General Meeting of the Company. The Company has received notices from the members of the Company under Section 257 of the Companies Act, 1956 proposing his candidature for the office of Director.

During the period under review Allahabad Bank, the Monitoring Institution under Corporate Debt Restructuring Scheme, vide its letter dated 14.08.2013 had nominated Mr. Parthdeb Datta as Nominee Director in place of Mr. Vipul Singla.

Ms. Priya Thapar has joined the Board as Additional Director w.e.f 26th November, 2013 and holds office as Additional Director upto the date of the forthcoming Annual General Meeting of the Company. The Company has received notices from the members of the Company under Section 257 of the Companies Act, 1956 proposing her candidature for the office of Director. Board of Directors in their Meeting held on 29.11.2013 has approved her appointment, subject to approval of Shareholders in Annual General Meeting, as Whole Time Director-Human Resource (HR).

Mr Apar Singh Dugal expired on 19.05.2013 and ceased to be the Director of the Company. Directors have placed their condolence on this sad demise and appreciate for his contribution, assistance and guidance during his tenure as Director of the Company.

Acknowledgement

Your Directors wish to place on record their appreciation for the team spirit, dedication, and commitment shown by the work force of the Company during this period. Their unstinted support has been and continues to be integral to your Company''s operations.

Your Directors acknowledges the valuable support of banks, customers, suppliers, business associates, shareholders for their continued co-operation and look forward to their continued support.

For and on behalf of the Board

New Delhi SAMIR THAPAR

Date: 29th November, 2013 Chairman & Managing Director


Mar 31, 2012

To the Members of JCT Limited

The Directors of your Company present the 63rd Annual Report on the affairs of the Company together with audited statement of account of the Company for the year ended on 31st March, 2012. The highlights of financial Results for the year are given below:

(Rs. in Lakhs)

2011-12 2010-11

Gross Income from operations 82,940 76,845

Other Income 728 501

Profit before Interest,Depreciation, 2,223 3,006 tax and Exceptional Items

Interest and financing charges 4,116 4,702

Depreciation and amortization 4,695 4,056

Expense

Exceptional Items

- Profit on Sale of building - 11762

- Loss on Sale of Shares of a 61 - Subsidiary Company 61

- Profit/(Loss) from Discontinuing (143) 7 Operations

Provision for Tax

- Current Year - 419

- Earlier Year 14 (6)

Net Profit/(Loss) (6,805) 5,604



Dividend

In view of losses, the Directors are unable to recommend any dividend.

Operations Textile Units

The expansion and modernization project of the company's manufacturing facilities which were undertaken in 2006-08 could not be fully utilized as the completion of the expansion coincided with global meltdown & recessionary market conditions. Demand for direct export and from garment manufacturers remained subdued during the period due to downward trend in the domestic as well as international markets.

High Cotton Prices, during the last procurement season of cotton the prices which went as high as Rs 62500 per candy from Rs 35000 per candy due to pre-mature announcement of cotton exports and other factors. The prices suddenly crashed to a level of Rs 32000 per candy. The fluctuation of cotton prices led to high cost cotton getting stuck with the mills and losses on account of rupee devaluation hit by the company. It affected even the entire industry. Against the huge increase in the prices of cotton, and other inputs the selling prices increased marginally during this period, thus leading to strain on the overall margins.

- The company is having 19.5 MW in house rice-husk based power plants. The rates of rice husk have been abnormally high this year.

- The company incurred operational cash losses during the financial year 2008-09 to 2011-12 and continued to service interest and repayment of debts to the lenders despite losses which resulted in further erosion of working capital and lower capacity utilization.

In Sriganganagar unit, the operations were discontinued in earlier years. The sale of Land is pending due to mutation and is under disposal. The company is taking steps to get the mutation formalities completed.

Financial problems:

In light of the scenario, as explained above, owing to marketing difficulties, the profitability of the Textile operations took a sharp dip during the said period. Cotton prices went up by almost 40%. The Government of India on realizing the liquidity crunch being faced by Textile Sector had given two years moratorium on the loans taken by companies under TUF scheme. However, the interest on these loans had to be serviced. Consequently in this situation the earnings which had gone negative on account of low capacity utilization, the company ended up paying interest to the Banks out of working capital. This situation led to the erosion of working capital.

Now that the fabric demand has again picked up, most Textile Companies of the country are running their Plants at full capacity. Inspite of the order-book being comfortable, full capacity utilization your Company continues to be elusive on account of working capital constraints.

Government policies:

In the year 2010-11 the policy of Government of India for allowing and thereafter banning export of cotton resulted textile industry incurring huge losses. Steps initiated by the company:

- The company has since expanded its customer base and has gone deeper with the existing customers to fully secure its production capacities. The company in these years, focused, especially on work-wear and sportswear segments.

- The company has been very guarded in covering cotton in the current season. We are now not only keeping track of cotton future in India but also in New York Exchange.

- The company has taken several power saving initiatives, which will cover a part of husk price hike.

Filament Unit

JCT continues to maintain its position as one of the largest Textile Grade Nylon yarn manufacturer in India with installed capacity of 14,000 TPA. During the year the company sold -11211 MT of filament yarn & 696 MT of nylon chips as compared to 11,496 MT of filament yarn and 741 MT of nylon chips during the previous year. The continuous upward trend in prices of Caprolactum has been a major concern for the company. The Caprolactum prices increased from average of Rs 104.49 kg in FY 2010 to Rs 139.67 kg in FY 2011 an increase of 34% against it the average realisation increase of only 23% from Rs 217.29 kg to Rs 268.09 kg. The capacity of the market to absorb prices is limited as weavers start moving to other type of yarns.

The company has made a major shift in the product mix where the dependability on yarn sold in Surat market has been shifted to yarn being sold in Amritsar and Mau markets. The change is very significant as LOY base 20 Mono Yarn is less prone to market fluctuation and has a much higher margin.

Finance

During the year, the company redeemed Zero Rate Debentures (ZRDs) of Rs. 26.23 lakhs, Optionally Partially Convertible Preference Shares (OPCPS) of Rs. 22.49 lakhs and repaid term loan installments of Rs.2471.23 lakhs as per stipulated terms. In certain cases of loans, debentures and Optionally Partially Convertible Preference Shares (OPCPS) which became due for repayment/ redemption during the year, there were delays in servicing the debt obligations due to liquidity constraints.

Corporate Debt Restructuring

The company had filed its proposal for restructuring its debt through CDR Mechanism in January 2012, which was admitted by the Corporate Debt Restructuring Empowered Group (CDR EG) on 24th February 2012. Further, the company received a Letter of Approval bearing Number BY.CDR/(PMJ) No 685/2012- 13 dated 21st September 2012 from the CDR EG approving the Restructuring Package which, inter-alia includes Protection to Lenders for loss on NPV basis, Reduction in Rate of Interest, Reschedulement of Repayment of Term Loans, Carving out Working Capital Term Loan from Working Capital Limits, Sanction of Need Based Additional Working Capital, Issuance of equity shares to lenders for part of their sacrifices on NPV basis and provision of fresh funding by the promoters. The implementation of the scheme is under progress.

Foreign Currency Convertible Bonds (FCCBs)

The Company could not redeem the Foreign Currency Convertible Bonds (FCCBs) on due date 08.04.2011 for paucity of cash funds. The Company is taking steps to restructure/ extend the maturity of the FCCBs. The Company is in disccussions with the majority of Bondholders to restructure and their response is positive. For restructuring of FCCBs, shareholders' approval is also being sought at the forthcoming Annual General Meeting. In the meantime, the Bank of New York Mellon, the Trustee of such FCCB holders has filed a winding up petition against the Company before the Hon'ble High Court of Punjab & Haryana, Chandigarh, which is pending hearing/disposal. In the light of on going talks with some of the major Bondholders and the merit of the petition, the company does not anticipate any adverse outcome.

Net Worth Erosion

The accumulated losses of the company at the end of financial year 31st March, 2012 have resulted in erosion of more than fifty percent of its peak net worth during the immediately preceding four financial years. While the company is taking necessary steps to protect further erosion, the Company will report to the Board for Industrial and Financial Reconstruction about such erosion of net worth as envisaged under Section 23 of the Sick Industrial Companies (Special Provision) Act, 1985 forthwith upon finalization of the duly audited accounts of the Company for the financial year ended 31st March, 2012. Shareholders are also requested to take note of this erosion and consider the same at the Annual General Meeting of the members being convened on 30th November, 2012.

Fixed Deposits (FDs)

Deposits remaining unclaimed at maturity amounted to Rs. 8.08 lakhs as on 31st March, 2012. Of the above, deposits of Rs. 5.18 lakhs have been repaid subsequently. Repayments and servicing of interest on fixed deposits remained prompt and regular.

In view of substantial erosion in net worth, the company has stopped accepting fresh and renewals of deposits. SUBSIDIARY COMPANY

The Company has sold its shareholding in the only subsidiary company and incurred a loss of Rs 60.70 lakhs.

Statutory Disclosures

Pursuant to the approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, copy of balance sheet, profit & loss account, cash flow statement, reports of the board of directors are annexed hereto and form an integral part of this report.

The particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are given in a separate Annexure to this Report. The Annexure is not being sent alongwith this Report to the Members of the Company in line with the provisions of Section 219(1)(b)(iv) of the said Act. These documents will be made available on request by any member of the Company. The statement containing the information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988 are annexed hereto and forms an integral part of the report.

Pursuant to Clause 49 of the Listing Agreement, report on Corporate Governance and Management Discussions and Analysis is annexed hereto and forms an integral part of this report.

Directors" Responsibility Statement

As required under Section 217 (2AA) of the Companies Act, 1956 this is to confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanations relating to material departures, if any;

ii) such accounting policies have been selected and applied consistently and judgments/estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii) proper and sufficient care have been taken with best of knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis.

Auditors

M/s S.P. Chopra & Company, Chartered Accountants, Auditors of the Company, retire and being eligible offer for re-appointment. The Audit Committee and the Board of Directors recommend the re-appointment of M/s S.P. Chopra & Company as the Auditors of the Company.

Auditors' Report

The report by the Auditors is self-explanatory. However, in respect of certain observations made by the Auditors in the Annexure to their main Report to the Members of the Company, directors have to submit that (a) delay in deosit of statutory dues in few cases were for very short period due to non-availability of funds timely;

(b) delay and default in repayment of term loan installments during the year were due to paucity of funds and the Company had also approached banks for restructuring of debt under CDR mechanism, the proposal of the company has been approved by the CDR Cell vide LOA dated 21st September, 2012 which is under implementation; (c) the company made a security deposit of Rs.11.50 Cr to an associate company due to non-fulfilment of a specific obligation stipulated in an agreement in 2008, the said security deposit has since been received back subsequently in 2012-13; and (d) the redemption of FCCBs was due on 8th April, 2011 for US$ 25.42 million alongwith redemption premium of US$ 5.08 million, the company could not make payment due to paucity of funds and approached bond holders for restructuring, the majority of bond holders have agreed and company is in discussion with the remaining bond holders. In the meantime, the trustees of the bondholders have filed winding up petition before Hon'ble High Court of Punjab & Haryana at Chandigarh, which is pending hearing / disposal. In the light of ongoing talks with the bondholders and the merit of the petition, the company does not anticipate any adverse outcome of the said litigation.

Cost Auditors

Pursuant to provisions of Section 233-B of the Companies Act, 1956, your Directors have appointed Mr. P.K. Verma AICWA, ACMM, as the Cost Auditors to conduct the Cost Audit of Textile Units at Phagwara and Sriganganagar and Filament Unit at Hoshiarpur, for the year ending on 31st March, 2012 and the requisite approval of Central Government have been received. Directors

In accordance with the provisions of the Companies act, 1956 and Articles of Association of the Company, Mr Apar Singh Dugal, retire by rotation and being eligible offer himself for re-election. Dr Ajit Kumar Doshi has joined the Board as Additional Director w.e.f 26th October, 2012 and holds office as Additional Director upto the date of the forthcoming Annual General Meeting of the Company. The Company has received notices from the members of the Company under Section 257 of the Companies Act, 1956 proposing his candidature for the office of Director.

Mr Mahesh Sahai and Dr Satya Pal Narang have resigned from the Board of the Company on 26.09.2011 and 13.10.2012 respectively. Your Directors wish to place on record appreciation for Mr Sahai and Dr Narang in respect of their gratitude and appreciation for assistance and guidance during their tenure as Directors of the Company.

Acknowledgement

Your Directors wish to place on record their appreciation for the team spirit, dedication, and commitment shown by the work force of the Company during this year. Their unstinted support has been and continues to be integral to your Company's operations. Your Directors acknowledges the valuable support of banks, customers, suppliers, business associates, shareholders for their continued co-operation and look forward to their continued support.



For and on behalf of the Board

New Delhi (SAMIRTHAPAR)

Date: 31st October, 2012 Chairman & Managing Director


Mar 31, 2010

The Directors of your Company present the 61st Annual Report on the affairs of the Company together with audited statement of account of the Company for the year ended on 31st March, 2010.

The highlights of financial Results for the year are given below:

(Rs. in lakhs)

2009-2010 2008-2009

Gross Income from operations 59,249 57,766

Other Income 1,285 1,946 Profit before Interest, Depreciation

and Exceptional Items 2,887 2,605

Interest & financing charges 4,689 4,311

Depreciation 3,927 4,356

Exceptional Items - (Loss) (net) (351) —

Provision for Tax 10 74

Net Profit/(loss) (6,090) (6,136)

DIVIDEND

In view of losses, the Directors are unable to recommend any dividend.

OPERATIONS

Textile Units

JCT undertook a major capital expenditure plan during 2006-08. At Phagwara textile mill the old set up of machines in the spinning and weaving sections were replaced with new set up of spinning lines and Airjet looms, while processing and dyeing capacities were enhanced. A new facility with capacities to produce high quality synthetic fabrics was also set up at Phagwara. The company also added 8 MW captive power generation plant at Phagwara in addition to existing 5 MW power plant and a new Effluent Treatment Plant (ETP) was also set up. Company had made massive investment for this expansion and modernization.

Due to recessionary market conditions more particularly in US and European markets, demand for export quality fabrics reduced drastically. This resulted in under utilization of capacities in the textile mills. Increase in capacities worsened the plight as the interest and depreciation burden has increased substantially.

All Indian textile mills were trying desperately to fill their expanded capacities. This led to cut throat competition and the margins remained under pressure with no relief from input costs. Despite cash losses in the textile operations, managements endeavored to service the interest and other debt obligations of the lenders by raising funds from other sources. In the process, cotton ginning and pressing factory at Abohar, which was part of the textile operations, had to be disposed off. The recessionary trend in the global market started receding from the third quarter of the 2009-10 and the demand of fabric started looking up from the international markets. However, the opportunity could not be fully exploited for want of sufficient working capital funds and as a result capacities remained under utilized and cash loss situation continued.

During the current year, to improve the capacities utilization, the funds have been infused in the system for working capital. With infusion of funds, both the Textile and Performance Fabrics Plants at Phagwara are operating at full capacities. The processing capacities at cotton plant are still under-utilized and expect to attain the full capacity utilization in a phased manner.

The company has set up a small garmenting unit having 160 machines within the existing set up at Phagwara as a step towards value addition and integration. The company has also set up retail showrooms for newly launched brand ‘Tyrock on franchise model and already 8 such showroom in the state of Punjab have been set up. The companys investment in these retail show rooms will be to the extent of working capital available. The company plans to increase the number of retail showrooms to 45 during the current year.

Production at the Textile Unit at Sriganganagar remained suspended since July, 2007. In December 2009, management negotiated with the workers unions for full and final settlement of workers of the Unit-1 out of the sale proceeds of the assets of the Unit-1 including land. The company has already settled and paid the dues of over 600 workers out of the sale proceeds and advances received against sale of the assets of the unit including land. Dues of 40 staff members are pending and will be settled out of the proceeds of land sale. The company expects to complete the transaction during the current year and money so received will be utilized towards settlement of debt / strengthening of working capital to some extent.

Filament Unit

JCT is one of the largest players in the Indian Nylon Filament Industry having capacity of 14,000 TPA. During the year the company sold 11,468 M.T. of Nylon Filament Yarn as compared to 11,426 M.T during the previous year. During the year, the unit operated at EBIDTA margins of 10.7% as against 8.9% in the previous year. The Caprolactum prices were quite low during the first quarter of the year and thereafter have been consistently on the rise and went upto an all time high of Rs. 141.50 per kg. The company is also adding capacity in its filament unit by putting up a second hand LOY line and 12 old DT machines capable of manufacturing fine denier yarns. Installation of the machines is in process. On complete installation, the yarn production capacity will increase by about 150 MT / month.

Finance

During the year, Banks extended the repayment period of term loans availed under Technology Up-gradation Fund Scheme, by a period of two years under the package announced by the Govt. of India.

During the year, holders of Foreign Currency Convertible Bonds (FCCB) for US$ 4,58,000 exercised option for conversion and 20,09,398 equity shares of Rs.2.50 each were allotted to them at a premium of Rs.10.38 as per terms of issue of FCCB.

During the year, the company repaid/redeem the term loan installments aggregating Rs. 698.56 lakhs, Optionally Partially Convertible Preference Shares (OPCPS) of Rs. 128.11 lakhs and Zero Rate Debentures (ZRDs) Rs. 437.78 lakhs as per stipulated terms. Short Term Loan of Rs. 2,000 lakhs from a Bank was also repaid during the year. In case of certain loans, debentures and Optionally Partially Convertible Preference Shares (OPCPS) which became due for repayment/ redemption during the year, there were delays in servicing the debt obligations due to liquidity constraints. As on 31.3.2010 term loan instalments of Rs. 86.90 lakhs remained overdue for repayments which have been paid subsequently. Zero Rate Debentures and OPCPS amounting Rs. 526.25 lakhs and Rs. 178.99 lakhs respectively due for redemption on 31.12.2009 also remained unpaid as on 31.3.2010 and the company is making arrangement for redemption. Due to inadequacy of profits, capital redemption reserve could not be made.

Fixed Deposit

Deposits remaining unclaimed at maturity amounted to Rs. 12.40 lakhs as on 31st March, 2010. Of the above, deposits of Rs. 7.64 lakhs have been repaid/ renewed subsequently. Repayments and servicing of interest on deposits remained prompt and regular.

Fixed Assets and Investments

During the year land at one of the units was revalued and resultant surplus Rs.4,373.60 lakhs has been credited to Revaluation Reserve Account. 90% of the book value of investment in JCT Electronics Ltd. amounting to Rs. 5,062.94 lakhs was written off with corresponding write back of provision for diminution in value of investment and had no net effect on the profit and loss account for the year.

Exceptional Items in Profit and Loss Account

As mentioned above, Cotton Ginning and Pressing factory at Abohar was sold during the year and resultant profit has been treated as an ‘Exceptional Item in the Profit & Loss account for the current year. Pursuant to closure of Unit-1 of Sriganganagar textile mill, expenses including towards settlement of workers net off the income has also been treated as an ‘Exceptional Item in the Profit & Loss account for the current year.

Net Worth Erosion

The accumulated losses of the Company at the end of financial year 31st March, 2010 have resulted in erosion of more than fifty percent of its peak net worth during the immediately preceding four financial years. While the Company is taking necessary steps to protect further erosion, the Company will report to the Board for Industrial and Financial Reconstruction about such erosion of net worth as envisaged under Section 23 of the Sick Industrial Companies (Special Provision) Act, 1985 forthwith upon finalization of the duly audited accounts of the Company for the financial year ended 31st March, 2010. Shareholders are also requested to take note of this erosion and consider the same at the Annual General Meeting of the members being convened on 29th September, 2010.

Statutory Disclosures

Pursuant to the approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, copies of balance sheet, profit & loss account, cash flow statement, reports of the board of directors and auditors of the subsidiaries are annexed hereto and form an integral part of this report.

As per the Central Government directives, the financial data of subsidiaries have been furnished as separate statement under ‘Details of Subsidiaries forming part of the Annual Report. Further, pursuant to Accounting Standard (AS-21) issued by the Institute of Chartered Accountants of India, consolidated financial statements presented by the Company in this Annual Report include financial information of the subsidiaries.

The particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are given in a separate Annexure to this Report. The Annexure is not being sent alongwith this Report to the Members of the Company in line with the provisions of Section 219(1)(b)(iv) of the said Act. These documents will be made available on request by any member of the Company.

The statement containing the information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are annexed hereto and forms an integral part of the report.

Pursuant to Clause 49 of the Listing Agreement, report on Corporate Governance and Management Discussions and Analysis are annexed hereto and form an integral part of this report.

Directors Responsibility Statement

As required under Section 217 (2AA) of the Companies Act, 1956 this is to confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanations relating to material departures, if any;

(ii) such accounting policies have been selected and applied consistently and judgments/estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) proper and sufficient care have been taken with best of knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the said Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis.

Auditors

M/s S.P. Chopra & Company, Chartered Accountants, Auditors of the Company, retire and being eligible offer for re-appointment. The Audit Committee and the Board of Directors recommend the re-appointment of M/s S.P. Chopra & Company as the Auditors of the Company.

Auditors Report

The report by the Auditors is self-explanatory. However in respect of certain observations made by the Auditors in the Annexure to their main Report to the Members of the Company, directors have to submit that (a) Delay in deposit of statutory dues in a few cases: delays in deposit of provident fund dues in respect of Sriganganagar unit were due to the financial constraints as there was no production activity and the said unit continued to incur cash losses; (b) default in repayment of Rs.88.47 lakhs to debenture holders and delays in repayment of dues of banks and other lenders: delays were due to financial constraints and were made good subsequently in some cases, while in other cases company is in discussion with the lenders for extension in repayment period; (c) utilisation of short term funds for long term use to the extent of Rs.771.92 lakhs: as there were cash losses, short term funds had to be utilised towards repayment of lenders dues.

Cost Auditors

Pursuant to provisions of Section 233-B of the Companies Act, 1956, your Directors have appointed Mr. P.K. Verma AICWA, ACMM, as the Cost Auditors to conduct the Cost Audit of Textile Units at Phagwara and Sriganganagar and Filament Unit at Hoshiarpur, for the year ending on 31st March, 2011 and the requisite approval of Central Government have been received.

Directors

In accordance with the provisions of the Companies act, 1956 and Articles of Association of the Company, Mr. Mahesh Sahai and Mr. A.S. Dugal, retire by rotation and being eligible offer themselves for re-election.

Acknowledgement

Your Directors wish to place on record their appreciation for the team spirit, dedication, and commitment shown by the work force of the Company during this year. Their unstinted support has been and continues to be integral to your Companys operations.

Your Directors express their gratitude to the financial institution and more particularly to the banks and business associates for their continued co-operation and look forward to their continued support.

For and on behalf of the Board

Place:New Delhi Samir Thapar

Dated: August 6, 2010 Vice Chairman & Managing Director

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